Commenting on the 2016 reserve results, which are 100% evaluated by Independent Qualified Reserves Evaluators, Steve Laut, President of Canadian Natural stated, “Canadian Natural continues to demonstrate the strength of our diverse and balanced asset base, and our ability to create value for shareholders in the short, mid and long term. Canadian Natural’s continued focus on enhancing execution and leveraging technology has lowered our overall cost structure and optimized our reserve additions. As a result, at the end of 2016, Canadian Natural increased Company Gross proved plus probable reserves to approximately 9.18 billion BOE, delivering excellent production replacement representing 147% of 2016 production.

The Company increased proved reserves by 4% with strong finding, development and acquisition costs of $3.72/BOE for proved reserves, including the change in future development capital.

Excellent recycle ratios were achieved with a proved recycle ratio of 3.8 times, including the change in future development capital. Excluding the change in future development capital, the proved recycle ratio was 1.9 times.

Canadian Natural is a unique E&P company that continues to deliver significant reserves with excellent finding, development and acquisition costs, reflecting Canadian Natural’s continued execution of its proven effective strategy.”

2016 YEAR-END RESERVES

Determination of Reserves

For the year ended December 31, 2016, the Company retained Independent Qualified Reserves Evaluators (IQREs), Sproule Associates Limited, Sproule International Limited and GLJ Petroleum Consultants Limited, to evaluate and review all of the Company’s proved and proved plus probable reserves. Sproule evaluated the Company’s North America and International crude oil, bitumen, natural gas and NGL reserves. GLJ evaluated the Company’s Horizon synthetic crude oil reserves. The IQREs conducted the evaluation and review in accordance with the standards contained in the Canadian Oil and Gas Evaluation Handbook. The reserves disclosure is presented in accordance with NI 51-101 requirements using forecast prices and escalated costs.

The Reserves Committee of the Company’s Board of Directors has met with and carried out independent due diligence procedures with the IQREs as to the Company’s reserves. All reserves values are Company Gross unless stated otherwise.

Corporate Total

– Canadian Natural’s 2016 performance has resulted in another year of excellent finding and development costs:

— Finding, Development and Acquisition (“FD&A”) costs, excluding the change in Future Development Capital (“FDC”), were $7.34/BOE for proved reserves and $9.34/BOE for proved plus probable reserves.

— FD&A costs, including the change in FDC, were $3.72/BOE for proved reserves and $5.66/BOE for proved plus probable reserves.

– Recycle ratios of 1.9 times and 1.5 times were achieved for proved and proved plus probable reserves respectively, excluding the change in FDC. Including the change in FDC, recycle ratios improve to 3.8 times and 2.5 times for proved and proved plus probable reserves respectively.

– Proved reserves additions and revisions, including acquisitions and dispositions, were 176 million bbl of crude oil, bitumen and NGL and 1.101 Tcf of natural gas. Proved plus probable reserves additions and revisions, including acquisitions and dispositions, were 242 million bbl of crude oil, bitumen and NGL and 1.167 Tcf of natural gas.

– The proved BOE reserve life index is 15.6 years and the proved plus probable BOE reserve life index is 25.4 years.

– North Sea proved reserves decreased 15% to 141 million BOE due to 2016 production and the planned abandonment of the Ninian North platform, commencing in 2017. North Sea proved plus probable reserves decreased 11% to 267 million BOE.

Net Present Value of Future Net Revenues, before income tax, discounted at 10%

Reserves Category

2015 ($ billion)

2016 ($ billion)

Increase

Proved developed producing

37.0

46.7

26%

Proved

65.2

69.3

6%

Proved plus probable

89.0

92.3

4%

Summary of Company Gross ReservesAs of December 31, 2016
Forecast Prices and Costs

Light and Medium Crude Oil (MMbbl)

Primary Heavy
Crude Oil
(MMbbl)

Pelican Lake
Heavy
Crude Oil
(MMbbl)

Bitumen
(Thermal Oil)
(MMbbl)

Synthetic Crude Oil (MMbbl)

Natural
Gas
(Bcf)

Natural Gas
Liquids (MMbbl)

Barrels
of Oil Equivalent (MMBOE)

North America

Proved

Developed Producing

115

95

211

322

2,544

4,074

100

4,066

Developed Non-Producing

10

16

3

13

–

369

9

113

Undeveloped

43

76

50

934

15

2,102

89

1,557

Total Proved

168

187

264

1,269

2,559

6,545

198

5,736

Probable

65

72

120

1,248

1,045

2,366

86

3,030

Total Proved plus Probable

233

259

384

2,517

3,604

8,911

284

8,766

North Sea

Proved

Developed Producing

28

31

33

Developed Non-Producing

2

2

2

Undeveloped

104

8

106

Total Proved

134

41

141

Probable

119

44

126

Total Proved plus Probable

253

85

267

Offshore Africa

Proved

Developed Producing

42

24

46

Developed Non-Producing

–

–

–

Undeveloped

45

7

46

Total Proved

87

31

92

Probable

46

49

54

Total Proved plus Probable

133

80

146

Total Company

Proved

Developed Producing

185

95

211

322

2,544

4,129

100

4,145

Developed Non-Producing

12

16

3

13

–

371

9

115

Undeveloped

192

76

50

934

15

2,117

89

1,709

Total Proved

389

187

264

1,269

2,559

6,617

198

5,969

Probable

230

72

120

1,248

1,045

2,459

86

3,210

Total Proved plus Probable

619

259

384

2,517

3,604

9,076

284

9,179

Summary of Company Net Reserves
As of December 31, 2016
Forecast Prices and Costs

Light and Medium Crude Oil (MMbbl)

Primary Heavy
Crude Oil
(MMbbl)

Pelican Lake
Heavy
Crude Oil
(MMbbl)

Bitumen
(Thermal Oil)
(MMbbl)

Synthetic Crude Oil (MMbbl)

Natural
Gas
(Bcf)

Natural Gas
Liquids (MMbbl)

Barrels
of Oil Equivalent (MMBOE)

North America

Proved

Developed Producing

104

80

164

257

2,186

3,682

78

3,483

Developed Non-Producing

9

14

3

11

–

331

7

99

Undeveloped

38

65

41

767

9

1,832

76

1,301

Total Proved

151

159

208

1,035

2,195

5,845

161

4,883

Probable

55

59

83

976

864

2,043

69

2,447

Total Proved plus Probable

206

218

291

2,011

3,059

7,888

230

7,330

North Sea

Proved

Developed Producing

28

31

33

Developed Non-Producing

2

2

2

Undeveloped

104

8

106

Total Proved

134

41

141

Probable

118

44

125

Total Proved plus Probable

252

85

266

Offshore Africa

Proved

Developed Producing

39

17

42

Developed Non-Producing

–

–

–

Undeveloped

35

6

36

Total Proved

74

23

78

Probable

34

32

39

Total Proved plus Probable

108

55

117

Total Company

Proved

Developed Producing

171

80

164

257

2,186

3,730

78

3,558

Developed Non-Producing

11

14

3

11

–

333

7

101

Undeveloped

177

65

41

767

9

1,846

76

1,443

Total Proved

359

159

208

1,035

2,195

5,909

161

5,102

Probable

207

59

83

976

864

2,119

69

2,611

Total Proved plus Probable

566

218

291

2,011

3,059

8,028

230

7,713

Reconciliation of Company Gross Reserves
As of December 31, 2016
Forecast Prices and Costs

PROVED

North America

Light and Medium Crude Oil (MMbbl)

Primary Heavy
Crude Oil
(MMbbl)

Pelican Lake
Heavy
Crude Oil
(MMbbl)

Bitumen
(Thermal Oil)
(MMbbl)

Synthetic Crude Oil (MMbbl)

Natural
Gas
(Bcf)

Natural Gas
Liquids (MMbbl)

Barrels
of Oil Equivalent (MMBOE)

December 31, 2015

138

213

268

1,225

2,408

6,038

195

5,453

Discoveries

1

–

–

–

–

3

–

2

Extensions

7

9

–

53

–

196

9

111

Infill Drilling

7

5

–

–

–

224

4

53

Improved Recovery

–

–

6

–

–

–

–

6

Acquisitions

15

–

–

3

–

103

5

40

Dispositions

–

–

–

–

–

(4)

–

(1)

Economic Factors

(5)

(3)

–

–

–

(102)

(1)

(26)

Technical Revisions

23

1

7

29

196

681

1

371

Production

(18)

(38)

(17)

(41)

(45)

(594)

(15)

(273)

December 31, 2016

168

187

264

1,269

2,559

6,545

198

5,736

North Sea

December 31, 2015

158

39

165

Discoveries

–

–

–

Extensions

–

–

–

Infill Drilling

1

–

1

Improved Recovery

–

–

–

Acquisitions

–

–

–

Dispositions

–

–

–

Economic Factors

–

–

–

Technical Revisions

(16)

16

(14)

Production

(9)

(14)

(11)

December 31, 2016

134

41

141

Offshore Africa

December 31, 2015

90

29

95

Discoveries

–

–

–

Extensions

–

–

–

Infill Drilling

1

1

1

Improved Recovery

–

–

–

Acquisitions

–

–

–

Dispositions

–

–

–

Economic Factors

–

–

–

Technical Revisions

5

12

7

Production

(9)

(11)

(11)

December 31, 2016

87

31

92

Total Company

December 31, 2015

386

213

268

1,225

2,408

6,106

195

5,713

Discoveries

1

–

–

–

–

3

–

2

Extensions

7

9

–

53

–

196

9

111

Infill Drilling

9

5

–

–

–

225

4

55

Improved Recovery

–

–

6

–

–

–

–

6

Acquisitions

15

–

–

3

–

103

5

40

Dispositions

–

–

–

–

–

(4)

–

(1)

Economic Factors

(5)

(3)

–

–

–

(102)

(1)

(26)

Technical Revisions

12

1

7

29

196

709

1

364

Production

(36)

(38)

(17)

(41)

(45)

(619)

(15)

(295)

December 31, 2016

389

187

264

1,269

2,559

6,617

198

5,969

Reconciliation of Company Gross Reserves
As of December 31, 2016
Forecast Prices and Costs

PROBABLE

North America

Light and Medium Crude Oil (MMbbl)

Primary Heavy
Crude Oil
(MMbbl)

Pelican Lake
Heavy
Crude Oil
(MMbbl)

Bitumen
(Thermal Oil)
(MMbbl)

Synthetic Crude Oil (MMbbl)

Natural
Gas
(Bcf)

Natural Gas
Liquids (MMbbl)

Barrels
of Oil Equivalent (MMBOE)

December 31, 2015

54

81

120

1,182

1,225

2,300

88

3,134

Discoveries

–

–

–

–

–

2

1

1

Extensions

8

4

–

29

–

106

8

66

Infill Drilling

3

2

–

1

–

64

2

19

Improved Recovery

–

–

1

–

–

–

–

1

Acquisitions

4

–

–

1

–

22

1

10

Dispositions

–

–

–

–

–

(3)

–

–

Economic Factors

(1)

–

–

–

–

(32)

(2)

(8)

Technical Revisions

(3)

(15)

(1)

35

(180)

(93)

(12)

(193)

Production

–

–

–

–

–

–

–

–

December 31, 2016

65

72

120

1,248

1,045

2,366

86

3,030

North Sea

December 31, 2015

126

57

135

Discoveries

–

–

–

Extensions

–

–

–

Infill Drilling

1

–

1

Improved Recovery

–

–

–

Acquisitions

–

–

–

Dispositions

–

–

–

Economic Factors

–

–

–

Technical Revisions

(8)

(13)

(10)

Production

–

–

–

December 31, 2016

119

44

126

Offshore Africa

December 31, 2015

52

45

59

Discoveries

–

–

–

Extensions

–

–

–

Infill Drilling

–

–

–

Improved Recovery

–

–

–

Acquisitions

–

–

–

Dispositions

–

–

–

Economic Factors

–

–

–

Technical Revisions

(6)

4

(5)

Production

–

–

–

December 31, 2016

46

49

54

Total Company

December 31, 2015

232

81

120

1,182

1,225

2,402

88

3,328

Discoveries

–

–

–

–

–

2

1

1

Extensions

8

4

–

29

–

106

8

66

Infill Drilling

4

2

–

1

–

64

2

20

Improved Recovery

–

–

1

–

–

–

–

1

Acquisitions

4

–

–

1

–

22

1

10

Dispositions

–

–

–

–

–

(3)

–

–

Economic Factors

(1)

–

–

–

–

(32)

(2)

(8)

Technical Revisions

(17)

(15)

(1)

35

(180)

(102)

(12)

(208)

Production

–

–

–

–

–

–

–

–

December 31, 2016

230

72

120

1,248

1,045

2,459

86

3,210

Reconciliation of Company Gross Reserves
As of December 31, 2016
Forecast Prices and Costs

PROVED PLUS PROBABLE

North America

Light and Medium Crude Oil (MMbbl)

Primary Heavy
Crude Oil
(MMbbl)

Pelican Lake
Heavy
Crude Oil
(MMbbl)

Bitumen
(Thermal Oil)
(MMbbl)

Synthetic Crude Oil (MMbbl)

Natural
Gas
(Bcf)

Natural Gas
Liquids (MMbbl)

Barrels
of Oil Equivalent (MMBOE)

December 31, 2015

192

294

388

2,407

3,633

8,338

283

8,587

Discoveries

1

–

–

–

–

5

1

3

Extensions

15

13

–

82

–

302

17

177

Infill Drilling

10

7

–

1

–

288

6

72

Improved Recovery

–

–

7

–

–

–

–

7

Acquisitions

19

–

–

4

–

125

6

50

Dispositions

–

–

–

–

–

(7)

–

(1)

Economic Factors

(6)

(3)

–

–

–

(134)

(3)

(34)

Technical Revisions

20

(14)

6

64

16

588

(11)

178

Production

(18)

(38)

(17)

(41)

(45)

(594)

(15)

(273)

December 31, 2016

233

259

384

2,517

3,604

8,911

284

8,766

North Sea

December 31, 2015

284

96

300

Discoveries

–

–

–

Extensions

–

–

–

Infill Drilling

2

–

2

Improved Recovery

–

–

–

Acquisitions

–

–

–

Dispositions

–

–

–

Economic Factors

–

–

–

Technical Revisions

(24)

3

(24)

Production

(9)

(14)

(11)

December 31, 2016

253

85

267

Offshore Africa

December 31, 2015

142

74

154

Discoveries

–

–

–

Extensions

–

–

–

Infill Drilling

1

1

1

Improved Recovery

–

–

–

Acquisitions

–

–

–

Dispositions

–

–

–

Economic Factors

–

–

–

Technical Revisions

(1)

16

2

Production

(9)

(11)

(11)

December 31, 2016

133

80

146

Total Company

December 31, 2015

618

294

388

2,407

3,633

8,508

283

9,041

Discoveries

1

–

–

–

–

5

1

3

Extensions

15

13

–

82

–

302

17

177

Infill Drilling

13

7

–

1

–

289

6

75

Improved Recovery

–

–

7

–

–

–

–

7

Acquisitions

19

–

–

4

–

125

6

50

Dispositions

–

–

–

–

–

(7)

–

(1)

Economic Factors

(6)

(3)

–

–

–

(134)

(3)

(34)

Technical Revisions

(5)

(14)

6

64

16

607

(11)

156

Production

(36)

(38)

(17)

(41)

(45)

(619)

(15)

(295)

December 31, 2016

619

259

384

2,517

3,604

9,076

284

9,179

Reserves Notes:

Company Gross reserves are working interest share before deduction of royalties and excluding any royalty interests.

Company Net reserves are working interest share after deduction of royalties and including any royalty interests.

BOE values may not calculate due to rounding.

Forecast pricing assumptions utilized by the Independent Qualified Reserves Evaluators in the reserve estimates were provided by Sproule Associates Limited:

2017

2018

2019

2020

2021

Average annual increase thereafter

Crude oil and NGL

WTI at Cushing (US$/bbl)

$

55.00

$

65.00

$

70.00

$

71.40

$

72.83

2.00

%

Western Canada Select (C$/bbl)

$

53.12

$

61.85

$

64.94

$

66.93

$

68.27

2.00

%

Canadian Light Sweet (C$/bbl)

$

65.58

$

74.51

$

78.24

$

80.64

$

82.25

2.00

%

Cromer LSB (C$/bbl)

$

64.58

$

73.51

$

77.24

$

79.64

$

81.25

2.00

%

Edmonton Pentanes+ (C$/bbl)

$

67.95

$

75.61

$

78.82

$

80.47

$

82.15

2.00

%

North Sea Brent (US$/bbl)

$

55.00

$

65.00

$

70.00

$

71.40

$

72.83

2.00

%

Natural gas

AECO (C$/MMBtu)

$

3.44

$

3.27

$

3.22

$

3.91

$

4.00

2.00

%

BC Westcoast Station 2 (C$/MMBtu)

$

3.04

$

2.87

$

2.82

$

3.51

$

3.60

2.00

%

Henry Hub (US$/MMBtu)

$

3.50

$

3.50

$

3.50

$

4.00

$

4.08

2.00

%

A foreign exchange rate of 0.7800 US$/C$ for 2017, 0.8200 US$/C$ for 2018, and 0.8500 US$/C$ after 2018 was used in the 2016 evaluation.

A barrel of oil equivalent (“BOE”) is derived by converting six thousand cubic feet of natural gas to one barrel of crude oil (6 Mcf:1 bbl). This conversion may be misleading, particularly if used in isolation, since the 6 Mcf: 1 bbl ratio is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. In comparing the value ratio using current crude oil prices relative to natural gas prices, the 6 Mcf: 1 bbl conversion ratio may be misleading as an indication of value.

Metrics included herein are commonly used in the oil and natural gas industry and are determined by Canadian Natural as set out in the notes below. These metrics do not have standardized meanings and may not be comparable to similar measures presented by other companies and may be misleading when making comparisons. Management uses these metrics to evaluate Canadian Natural’s performance over time. However, such measures are not reliable indicators of Canadian Natural’s future performance and future performance may vary.

Reserve additions and revisions are comprised of all categories of Company Gross reserve changes, exclusive of production.

Production replacement or Reserve replacement ratio is the Company Gross reserve additions and revisions, for the relevant reserve category, divided by the Company Gross production in the same period.

Reserve Life Index is based on the amount for the relevant reserve category divided by the 2017 proved developed producing production forecast prepared by the Independent Qualified Reserve Evaluators.

Finding, Development and Acquisition (“FD&A”) costs are calculated by dividing the sum of total exploration, development and acquisition capital costs incurred in 2016 by the sum of total additions and revisions for the relevant reserve category.

FD&A costs including change in Future Development Capital (“FDC”) are calculated by dividing the sum of total exploration, development and acquisition capital costs incurred in 2016 and net change in FDC from December 31, 2015 to December 31, 2016 by the sum of total additions and revisions for the relevant reserve category. FDC excludes all abandonment and reclamation costs.

Recycle Ratio is the operating netback (in $/BOE for the year) divided by the FD&A (in $/BOE). Operating netback is production revenues, excluding realized gains and losses on commodity hedging, less royalties, transportation and production expenses, calculated on a per BOE basis.

Advisories & Contact

Forward-Looking Statements

Certain statements relating to Canadian Natural Resources Limited (the “Company”) in this document or documents incorporated herein by reference constitute forward-looking statements or information (collectively referred to herein as “forward-looking statements”) within the meaning of applicable securities legislation. Forward-looking statements can be identified by the words “believe”, “anticipate”, “expect”, “plan”, “estimate”, “target”, “continue”, “could”, “intend”, “may”, “potential”, “predict”, “should”, “will”, “objective”, “project”, “forecast”, “goal”, “guidance”, “outlook”, “effort”, “seeks”, “schedule”, “proposed” or expressions of a similar nature suggesting future outcome or statements regarding an outlook. Disclosure related to expected future commodity pricing, forecast or anticipated production volumes, royalties, operating costs, capital expenditures, income tax expenses and other guidance, constitute forward-looking statements. Disclosure of plans relating to and expected results of existing and future developments, including but not limited to the Horizon Oil Sands operations and future expansions, Primrose thermal projects, Pelican Lake water and polymer flood project, the Kirby Thermal Oil Sands Project, the construction and future operations of the North West Redwater bitumen upgrader and refinery, and construction by third parties of new or expansion of existing pipeline capacity or other means of transportation of bitumen, crude oil, natural gas or synthetic crude oil (“SCO”) that the Company may be reliant upon to transport its products to market also constitute forward-looking statements. This forward-looking information is based on annual budgets and multi-year forecasts, and is reviewed and revised throughout the year as necessary in the context of targeted financial ratios, project returns, product pricing expectations and balance in project risk and time horizons. These statements are not guarantees of future performance and are subject to certain risks. The reader should not place undue reliance on these forward-looking statements as there can be no assurances that the plans, initiatives or expectations upon which they are based will occur.

In addition, statements relating to “reserves” are deemed to be forward-looking statements as they involve the implied assessment based on certain estimates and assumptions that the reserves described can be profitably produced in the future. There are numerous uncertainties inherent in estimating quantities of proved and proved plus probable crude oil, natural gas and natural gas liquids (“NGLs”) reserves and in projecting future rates of production and the timing of development expenditures. The total amount or timing of actual future production may vary significantly from reserve and production estimates.

The forward-looking statements are based on current expectations, estimates and projections about the Company and the industry in which the Company operates, which speak only as of the date such statements were made or as of the date of the report or document in which they are contained, and are subject to known and unknown risks and uncertainties that could cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such risks and uncertainties include, among others: general economic and business conditions which will, among other things, impact demand for and market prices of the Company’s products; volatility of and assumptions regarding crude oil and natural gas prices; fluctuations in currency and interest rates; assumptions on which the Company’s current guidance is based; economic conditions in the countries and regions in which the Company conducts business; political uncertainty, including actions of or against terrorists, insurgent groups or other conflict including conflict between states; industry capacity; ability of the Company to implement its business strategy, including exploration and development activities; impact of competition; the Company’s defense of lawsuits; availability and cost of seismic, drilling and other equipment; ability of the Company and its subsidiaries to complete capital programs; the Company’s and its subsidiaries’ ability to secure adequate transportation for its products; unexpected disruptions or delays in the resumption of the mining, extracting or upgrading of the Company’s bitumen products; potential delays or changes in plans with respect to exploration or development projects or capital expenditures; ability of the Company to attract the necessary labour required to build its thermal and oil sands mining projects; operating hazards and other difficulties inherent in the exploration for and production and sale of crude oil and natural gas and in mining, extracting or upgrading the Company’s bitumen products; availability and cost of financing; the Company’s and its subsidiaries’ success of exploration and development activities and its ability to replace and expand crude oil and natural gas reserves; timing and success of integrating the business and operations of acquired companies; production levels; imprecision of reserve estimates and estimates of recoverable quantities of crude oil, natural gas and NGLs not currently classified as proved; actions by governmental authorities; government regulations and the expenditures required to comply with them (especially safety and environmental laws and regulations and the impact of climate change initiatives on capital and operating costs); asset retirement obligations; the adequacy of the Company’s provision for taxes; and other circumstances affecting revenues and expenses.

The Company’s operations have been, and in the future may be, affected by political developments and by federal, provincial and local laws and regulations such as restrictions on production, changes in taxes, royalties and other amounts payable to governments or governmental agencies, price or gathering rate controls and environmental protection regulations. Should one or more of these risks or uncertainties materialize, or should any of the Company’s assumptions prove incorrect, actual results may vary in material respects from those projected in the forward-looking statements. The impact of any one factor on a particular forward-looking statement is not determinable with certainty as such factors are dependent upon other factors, and the Company’s course of action would depend upon its assessment of the future considering all information then available.
Readers are cautioned that the foregoing list of factors is not exhaustive. Unpredictable or unknown factors not discussed in this report could also have material adverse effects on forward-looking statements. Although the Company believes that the expectations conveyed by the forward-looking statements are reasonable based on information available to it on the date such forward-looking statements are made, no assurances can be given as to future results, levels of activity and achievements. All subsequent forward-looking statements, whether written or oral, attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by these cautionary statements. Except as required by law, the Company assumes no obligation to update forward-looking statements, whether as a result of new information, future events or other factors, or the foregoing factors affecting this information, should circumstances or Management’s estimates or opinions change.